Mayor Asks 2.5-mill Hike In 1987 Tax No Layoffs, Service Cuts In Proposal From Marcincin

October 17, 1986|by DAN HARTZELL, The Morning Call

Bethlehem taxpayers will be feeling a bigger bite in their property levies next year, but not as much as might have been expected.

Mayor Paul Marcincin - possibly the former mayor as of Monday - announced yesterday that his administration has managed to keep the property tax increase to 2.5 mills or less for 1987. No layoffs or reductions in city services are anticipated as part of the budget plan.

Marcincin, in the first year of his third consecutive term, could be removed from office Monday by Northampton County Court because the state Supreme Court recently upheld a city law limiting mayoral terms to two. He has not announced whether he will appeal the decision.

But while he's still around, Marcincin feels the 2.5-mill increase is an accomplishment in the face of an expected $1-million budgetary shortfall.

As the federal government struggles to reduce the nation's level of debt, the administration and Congress have eliminated the general revenue-sharing program that netted Bethlehem $962,000 this year.

"We lost our revenue sharing, which represents almost 4 mills" in property taxes, Marcincin said yesterday in an unusual press conference on the 1987 budget, even though the document is not yet completed.

Marcincin generally waits until the budget goes to City Council for its consideration before making any details public. But he said earlier this week that he intends to announce some things that he feels are accomplishments of his administration before its possible demise.

Few details were available yesterday, but Marcincin and Business Administrator Jack Downing said the revenue-sharing shortfall not covered by the tax increase - about $320,000 - would be made up by an unusually high year-end cash balance, by general belt-tightening measures, and by increases in business tax revenues and other modest increases, including a $132,000 refund from medical insurance costs.

With 1 mill netting the city about $273,000, a 2.5-mill increase would realize about $682,500 for the general fund.

Marcincin also gave credit to city workers, noting that three of four unions have settled for 4-percent wage increases for 1987 as the first leg of three-year contracts, but agreed to delay the increases until July or later, saving the city substantial money. One contract remains to be settled.

Marcincin said increasing the millage by up to 2.5 mills would keep the city below the allowable millage standard of 25 mills for general fund expenditures. The cap excludes payments for recreation, library services or increases in municipal pension contributions since 1984.

While the 1986 property tax rate stands at 33 mills, paying off city debt accounts for 8.57 mills, and payments to the library, 1.97 mills, leaving general fund income at 22.51 mills. The 2.5-mill increase would bring the city to 25.01 mills, but since debt service is expected to be higher next year, some leeway will be established for the general fund limitation, Downing said.

Marcincin said keeping the rate below the cap means the city will not have to petition Northampton County Court for an increase in the allowable millage.

The mayor said the agreement of sale for Lehigh University to purchase part of Bethlehem Steel Corp.'s Homer Research Laboratory complex would lose some tax revenue. But the exact amount has not been determined since some of the property may remain on the rolls, as profit-making enterprises could be installed in the buildings.

Downing said that according to current estimates about $3-million worth of property could be lost to the university's tax-exempt status, losing about $100,000 for the city at the 33-mill rate.

"But that's (Lehigh's) number at this point," Downing said of the $3- million valuation, adding that details have yet to be worked out. Lehigh has not yet purchased the property.

Marcincin and Downing declined to say what the total expenditure estimate will be for 1987, but the mayor said it would be "about the same as this year," estimated at $22.1 million. Property taxes were increased by 3 mills for 1986. The last tax hike prior to that was the 2-mill levy in 1984, when 42 payroll positions were eliminated as well.

The budget, over which City Council has absolute control, goes to council for review next month. Full details of the administration's proposal will be released then, Marcincin said.